Morgan Hemp Blog

Landlords’ replacement wear and tear allowance

Tuesday, March 1, 2016

Capital allowances are not available for expenditure on furniture and furnishings for use in dwelling houses. However, until 5 April 2016 (1 April 2016 for corporation tax) a deduction for wear and tear may be claimed (known as a ‘wear and tear allowance election’), equal to 10% of the ‘net rents’ from furnished lettings (ie after deducting payments that would normally be borne by the tenant, such as water rates). In addition, a deduction may be claimed for replacing fixtures that are an integral part of a building…

Personal savings allowance update

Tuesday, March 1, 2016

From 6 April 2016, the personal savings allowance (PSA) will allow basic rate taxpayers to receive up to £1,000 of savings income tax-free. For higher rate taxpayers, this limit will be £500. HMRC have published guidance setting out details of what counts as savings income and how the allowance will be calculated, including some useful examples.

Savings income includes account interest from:

– bank and building society accounts;
– accounts with providers like credit unions or National Savings and Investments.

It also includes:

– interest distributions (but not dividend distributions) from authorised unit…

Februrary Question and Answer Section

Wednesday, February 10, 2016

Q. Did my extended leave constitute a cessation of trade? I have been the sole director of a trading limited company for many years. Last year, I decided to take a long holiday and travelled around the world with my wife – indeed, we got on so well that we stayed away for around 12 months! Whilst I was away the company continued to collect outstanding payments, but it received no other income. I have now taken on another director/shareholder (50%) and company trading has resumed. Should I…

Could EA exemption be avoided?

Wednesday, February 10, 2016

The Chartered Institute of Taxation (CIOT) has recently warned that Government plans to exclude one-person businesses from claiming the national insurance Employment Allowance (EA) from April 2016 will be too easy to dodge.

The Institute says that the planned curbs are easily avoided, either by appointing another director, such as a spouse, civil partner, other family member or friend, and paying that person a token wage; or by arranging payments of earnings so that the worker is not a director when at least one of the payments is made….

Simplification of VAT MOSS for small businesses

Wednesday, February 10, 2016

HMRC Brief 4/2016 entitled VAT MOSS – simplifications for businesses trading below the VAT registration threshold, outlines simplifications available to businesses trading below the UK’s VAT registration threshold (currently £l;82,000) that make supplies of digital services (telecommunications, broadcasting or electronically supplied services) to consumers in other EU member states. Some simplifications are already in place and Brief 4/2016 announces two new areas of help for the smallest businesses.

Businesses need to determine where their customer is located. There are specific rules in place for certain types of transactions (see…

HMRC prepare for National Living Wage (NLW)

Wednesday, February 10, 2016

The government has recently launched its campaign to promote the introduction of the new national living wage (NLW), which will take effect from 1 April 2016. From that date workers in the UK aged over 25 earning the minimum rate of £l;6.70 per hour will see a 50p increase in their minimum hourly rate, which is set to rise to £l;7.20 per hour.

The NLW will be enforced by HMRC alongside the national minimum wage (NMW), which they have enforced since its introduction in 1999.

The NMW is the minimum…

Stamp Duty Land Tax (SDLT) on additional properties

Wednesday, February 10, 2016

Proposals to bring in higher rates of stamp duty land tax (SDLT) on purchases of additional residential properties are expected to be finalised in time for the forthcoming Spring Budget on 16 March 2016.

SDLT is paid on the purchase of residential property in increasing portions of the property price above £l;125,000. Current rates are as follows:

– SDLT for a property with Purchase price of up to £l;125,000 is currently 0% with a proposed additional charge of 3%.
– SDLT on the next £l;125,000 of the Purchase price is currently…

Another Expertise Boost for Morgan Hemp Team

Wednesday, February 10, 2016

Leading South Wales Chartered Certified Accountancy firm Morgan Hemp is expanding its team, with two more recruits joining the fold.

Alice Bowen and Hayley Jones, both Semi-Senior Accountants, have been recruited as part of ongoing expansion at the Swansea company.

The Swansea-based firm has seen a steady influx of new employees over the past few month, along with another one of its Senior Accounts Clerks gaining full ACCA (The Association of Chartered Certified Accountants) membership.

Morgan Hemp Director Martin Hudson said: “We are delighted that Alice and Hayley have joined us…

January Key Tax Dates

Monday, January 4, 2016

1 – Due date for payment of Corporation Tax for the year ended 31 March 2015

14 – Return and payment of CT61 tax due for quarter to 31 December 2015

19/22 – PAYE/NIC, student loan and CIS deductions due for month to 5/1/2016 or quarter 3 of 2014/16 for small employers

31 – Deadline for filing 2015 Self Assessment personal, partnership and trust Tax Returns – £100 first penalty for late filing even if no tax is due or tax due is paid on time
– Balancing self assessment payment due…

January Questions and Answers

Monday, January 4, 2016

Q. What is our IHT position following a change of ownership?

A. In 2014, my partner and I changed the ownership status of our house from joint tenants to tenants-in-common. At that time, my share of the equity was reduced from 50% to 25% and my partner’s was, in turn, increased to 75%. Does this count as a lifetime gift for inheritance tax purposes (IHT)?

If you are married to you partner (spouse or civil partners), then the change will not count as a lifetime gift (a potentially exempt transfer…